Earnings Release Q4 FY19 - TAKE Solutions › images › financial › take_solutions_q… · Significant one-time expenses to the tune of USD 4.83 Mn were provided for/incurred in

Confidential

Earnings ReleaseQuarter and Year Ended March 31, 2019

Confidential

TAKE Solutions aspires to be 500M by 2021We leverage our unique blend of a full-service CRO and a technology-led life sciences services provider withexpertise in analytics and data sciences, through platform-driven full-service Clinical, Regulatory and Safetysolutions and services, to enable companies to bring life-saving drugs to market quickly and effectively

2

Grow & strengthen Regulatory and Safety/PV businesses

Achieve greater operating efficiency

Develop and expand Clinical verticalas a critical growth engine

Strategic Objective

Confidential 3

Expansion of addressable market

Investing in competencies and infrastructure worldwide

Investment in talent, technology, IP & platforms

Key Tenets To achieve our Life Sciences Growth Strategy

Creation of sustainable, long-term shareholder returns

Confidential 4


Moved from Technology provider to platform-driven CRO

Technology

Regulatory

Safety

Services

Technology

Nets

Consulting

Regulatory

Safety

Services

Technology

Nets

Consulting

Clinical Regulatory

Safety

Technology Company Technology-Enabled Services Organization

Platform-driven CRO

2007 2011

WCI Consulting,UK

Ecron Acunova,India

2016 2019

DataCeutics,USA

OnsphereCorporation,

USA

KAI Research,USA

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OneClinical our AI and analytics based clinical trials management platform has enabled25% cost reduction in running a trial

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PhDs, Doctors, Statisticians, & Scientists form a significant portion of the team

Developed over 260 bioanalytical methods to determine the concentration of active ingredient in sample

50% of associates with 10+ years of experiencein the industry

8 unique technology IPs tailored for Life Sciences

Investment inTalent, Technology, IP & Platforms

Nurtured & Enhanced Domain Expertise and Tech Focus

OneClinical

Confidential 6

Investing inCompetencies & Infrastructure Worldwide

Nurtured & Enhanced Domain Expertise and Tech Focus

USA HQ: Princeton, NJClinical, Regulatory & Safety consulting and technology centers. Clinical data sciences center in Philadelphia. Clinical trials operations across multiple sites.

LATAM Delivery Centre: Bogota, ColumbiaRegulatory & Safety support across 9+ countries in region

Europe HQ: Frankfurt, GermanyMajor trial operations center in Germany and sites through Europe Specialists in UK, Sweden, Germany, Poland, Denmark, Russia and other locations

APAC HQ: Chennai, IndiaClinical Operations (Incl. Generics) in Bangalore, Chennai, Mangalore and Manipal Regulatory & Safety/PV operations hub in Chennai

3 Clinical Pharmacology

Units for Bioavailability

Studies

2 Bioanalytical Laboratories 2 ISO27001

Compliant Datacenters

20 offices across

12 countries

Multi-country Multi-site Clinical Trial Capability

7500+ sites120000+ patients25,000 volunteers20+ therapeutic

areas

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Our Impact

400+ Clinical Trials

1000+ Bioequivalence &

Lab Studies

260+ Bioanalytical

Methods Developed

120000+ Regulatory Submissions

300+ Safety Consulting

Engagements

40+ Successful GCP & Non-GCP

Audits

10 Unique Proprietary

Industry Networks

120+ Members for Industry Networks

5 Successful Global Life Sciences

Acquisitions

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Life Sciences M&A marketplace remains robust

Sharp focus on international opportunities

TAKE constantly evaluates opportunities for inorganic growth

8

M&A Philosophy Behind the scenes of our Inorganic Growth Engine

Our M&A targets are selected basis the following guidelines:Complement our existing capabilities ● Are earnings accretive ● Have over 75% of revenue as recurring revenue ● Expand our sales reach, and augment our customer base ● Have the ability to expand the EBITDA by 500 bps over 2 years ● Deals are structured with earnouts

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Life Sciences Outsourcing

USD 36.8 Bn(2018)


USD 43.9 Bn(2021)


USD 41.1 Bn(2020)


USD 38.8 Bn(2019)

Clinical84%

Life Sciences Outsourcing Industry Growth & Outlook

2021 Projected growth to USD 43.9B at 6.06% CAGR

5.43% Growth Y-o-Y

6.06%

CAGR

Confidential 10

Steadily shifted focus to Life Sciences to drive growthTAKE Solutions’ Growth Journey

Technology Company Technology-Enabled Services Organization

Platform-driven CRO

Revenue EBITDA

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

19% CAGR

10% CAGR

23% CAGR

11% CAGR

10% CAGR

23% CAGR

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Annual Performance

Y-o-Y Growth (%)

28.5 %FY18

15,872.43 FY19

20,389.98

Operating Revenue (INR Millions)

Y-o-Y Growth (%)

18.6 %FY18

245.92 FY19

291.60

Operating Revenue (USD Millions)

Y-o-Y Growth (%)

25.1%Y-o-Y Growth (Adj)

36.1%

FY18

3,064.75

FY19

3,834.61FY19 (Adj)

4,172.35

Operating EBITDA (INR Millions)

Y-o-Y Growth (%)

15.5%Y-o-Y Growth (Adj)

25.7%

FY18

47.46

FY19

54.84FY19 (Adj)

59.67

Operating EBITDA (USD Millions)

69.93Period Average Rate

69.57Period Closing Rate

Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

Significant one-time expenses to the tune of USD 4.83 Mn were provided for/incurred in the financialyear. While USD 1.73 Mn was provided for on account of our European restructuring, around USD 2.00Mn was the transaction costs incurred for the recently concluded acquisitions. We had also providedfor forex adjustments to the extent of USD 1.10 Mn.

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We continue to maintain a robust EBITDA margin of over 20%, the company has benefitted from sale of the SCM vertical which was low on EBITDA.However, the Effective Tax Rate has gone up from 14.96% to 17.29%.

In INR Mn

PARTICULARS FY19-Reported

% FY19-Adjusted

%

Operating EBITDA 3,834.61 18.81% 4,172.35 20.46%

EBITDA 3,942.10 19.23% 4,279.84 20.88%

PBT 2,156.90 10.52% 2,494.64 12.17%

PAT 1,783.93 8.70% 2,063.27 10.07%



Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

Annual Performance

Confidential 13

Annual Profitability

1879.79

2156.90

2494.62

FY18

FY19

FY19 (Adj)

FY19 – PBT(INR) (Adj)INR 2,494.62 Mn 33.0%

29.11

30.85

35.68

FY18

FY19

FY19 (Adj)

FY19 – PBT (USD) (Adj)USD 35.68 Mn 22.6%

14.96%

17.29%

FY18

FY19

FY19 – Tax Rate17.29%

11.79%

10.58%

12.20%

FY18

FY19

FY19 (Adj)

FY19 – PBT Margin (Adj)12.2% 233 bps40 bps



Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

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Financial Growth Delivering Growth with Healthy Margins

All figures in INR Millions

7,304

10,301

13,446

15,872

20,390

1,577 2,340 2,751 3,129

4,280

1,494 2,133 2,622 3,065

4,172

FY15 FY16 FY17 FY18 FY19

OperatingRevenue

Adjusted Operating EBITDA

Adjusted EBITDA

FY19 Reported Operating EBITDA

INR 3,834.61 Mn (18.81%)

FY19 Reported EBITDA

INR 3,942.10 Mn (19.23%)

20.46% 20.70%

19.50% 19.31%

20.46%

21.34%22.27%

20.27%19.63%

20.88%

Adjusted Operating EBITDAMargins

Adjusted EBITDA Margins

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Investing in competencies and infrastructure

Investment in talent, technology, IP & platforms

FY19 Year in Review Further consolidation of our Life Sciences Strategy

• Expanded capacity by moving to larger facilities in Princeton and Bangalore

• Inaugurated new dossier printing facility in Chennai

• Added 6 senior leaders to the global team

• Enhanced 3 technology IPs including pharmaREADY, and traceREADY

• Built up further capabilities to OneClinical our eClinicalplatform

• Developed 16 bioanalytical methods

• Augmented Clinical Data Services offerings through acquisition of high-end data sciences company DataCeutics

• Expanded CRO operations in USA by acquiring US-based CRO KAI Research

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Q-o-Q Growth (%)

2.4 %

Y-o-Y Growth (%)

17.6 %

Q3 FY19

5,216.40

Q4 FY18

4,539.23 Q4 FY19

5,339.38

Operating Revenue (INR Millions)

Q-o-Q Growth (%)

4.7 %

Y-o-Y Growth (%)

7.9 %

Q3 FY19

72.43

Q4 FY18

70.33 Q4 FY19

75.87

Operating Revenue (USD Millions)

Quarterly Performance Operating Revenue



Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

The Company has witnessed a significant movement in the last two quarters in the billing from US. The Indian Operations continue to support the business being originated from US geography.

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Q-o-Q Growth (%)

-8.1%Q-o-Q Growth (Adj)

-3.7%

Y-o-Y Growth (%)

-10.4%Y-o-Y Growth Adj (%)

10.2%Q3 FY19

882.27Q3 FY19 (Adj)

1,034.45

Q4 FY18

905.12 Q4 FY19

810.69Q4 FY19 (Adj)

996.24

Operating EBITDA (INR Millions)

Q-o-Q Growth (%)

-5.3%Q-o-Q Growth (Adj)

-0.2%

Y-o-Y Growth (%)-17.3%

Y-o-Y Growth Adj (%)

2.2%

Q3 FY19

12.25Q3 FY19 (Adj)

14.35

Q4 FY18

14.02

Operating EBITDA (USD Millions)

Q4 FY19

11.59Q4 FY19 (Adj)

14.32

Quarterly Performance Operating EBITDA

Significant one-time expenses to the tune of USD 4.83 Mn were provided for/incurred in Q3 and Q4of FY19. While USD 1.73 Mn was provided for on account of our European restructuring, around USD1.00 Mn was the transaction costs incurred for the recently concluded acquisitions in Q4 FY19. Wehad also provided for forex adjustments to the extent of USD 1.10 Mn and had incurred around USD1.00 Mn by way of transaction costs for the M&A activity in Q3 FY19.



Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

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Quarterly Profitability

439.17591.35

345.65531.20

Q3 FY19Q3 FY19 (Adj)


Q4 FY19 – PBT(INR) (Adj)INR 531.20 Mn -10.2%

6.098.19

4.94 7.67



Q4 FY19 – PBT (USD) (Adj)USD 7.67 Mn

6.4%

17.19%

21.70%

Q3 FY19

Q4 FY19

Q4 FY19 – Tax Rate21.7%

8.42%11.30%

6.45%9.90%



Q4 FY19 – PBT Margin (Adj)9.9% 451 bps139 bps



Q4 FY19



Q3 FY19



Q4 FY18

DollarRates

Confidential 19

Supply Chain Business Profitability

Achieving consistent profits

APA Engineering is a subsidiary ofTAKE Solutions, operating in theSupply Chain Management Space,covering Engineering, Sourcing,Compliance and Technologydomains with a Global DeliveryModel to increasingly drivecompetitive advantage to thecustomers. It is a fast growingcompany that offers a completerange of source to pay solutions.

107.75115.85

140.33

3.2% 2.2% 2.5%0

20

40

60

80

100

120

140

160

FY 17 FY 18 FY 19

Revenue PAT

In INR Mn

Confidential

Legend:

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Increasing the Share Of Our Clinical Business Ramping up our Global Clinical Trials Capabilities

FY16 FY17 FY18 FY19

Clinical

Regulatory& Safety/PV

Consulting & Nets

Limited offerings + Extended Geographical Presence

Extended offerings + Extended Geographical PresenceLimited offerings + Limited Geographical Presence

Full-service offerings + Global Presence

Our comprehensive offerings includeFull-service Clinical Trials, Biologics & Biosimilars Studies, Medical Imaging Services, Non-Interventional StudiesBioavailability & Bioequivalence Studies, Clinical Data Services, OneClinical eClinical platformEnd-to-end Regulatory Services (including Submissions & Publishing, Labeling & Artwork, and License Maintenance), pharmaREADY suite, traceREADY suite, End-to-End PV Services, Safety Risk Management, Adverse Event Reporting, Regulatory Information Management Consulting & Implementation, Signal Management, Benefit Risk Governance, pvnet, pvconnect, labelnet, pvindia

Confidential 21

1,000 1,038 836

EUROPE

FY17 FY18 FY19

APAC10,664

12,707

17,046

AMERICAS

FY17 FY18 FY19

1,782 2,128

2,508

FY17 FY18 FY19

34%YoY

3.7%YoY

AMERICAS accounts for 83.6% of the Revenue

APAC accounts for 12.3% of the Revenue

EUROPE accounts for 4.1% of the Revenue

18%YoY

AMERICA’s revenue dominance continues

Significant increase inAMERICAS and APAC footprint

LS RevenueAcross Geographies

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Qualified professional workforce across the globeCost of RevenueManpower

We are dependent on highly skilled manpower and with a global presence The availability of the right resources has not been a challenge

FY 19 470 employees

FY 18 345 employees

AMERICAS

FY 19 134 employees

FY 18 195 employees

EUROPE

FY 19 991 employees

FY 18 960 employees

APAC

26%

27%

47%LS & Technology Domain ExpertsEngineering and Management ProfessionalsOther Competencies

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Optimal Debt-Equity Mix!

The company’s steady growth has opened up a healthy credit

line, which is being appropriately availed as required. While

the company has around INR 575.59 Mn of Capex Funding

as on 31st March 2019, it has close to INR 4,163.40 Mn of

Working Capital Funding as on even date. While the

group’s borrowing has increased in overall numbers, the Debt-

Equity Ratio continues to remain optimal at 0.31 as against

0.23 in FY 18.

Borrowings

INR Borrowings(INR Mn)

USD Borrowings(INR Mn)

Average Cost of Borrowing

(%)6.3% 7.2%

Debt/EquityRatio

0.24 0.31

USD denominated borrowing is higher because more than 80% of our operating revenue is from the Americas

3,242.2 4,739.0Total Borrowing

(INR Mn)

FY18 FY19

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Consistently investing in expanding infrastructure CAPEXFuture Direction

Our capex policy, as a CRO, would be to invest in tangible

assets upfront to increase earnings capacity in future. We

would be keen to replace assets before they become obsolete

and we would have a keen eye for any new technology coming

up in the market.

Our key differentiator being specialized technology-backed

services, we would also look at stepping-up the

investment in IPs. We are also open for partnering with

small-time entrepreneurial technology providers in the

forthcoming financial year.

Confidential 25www.takesolutions.com

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Group Structure

3 Entities in India

2 Entities in Singapore

5 Entities in US

4 Entities in UK

One holding company and twoother operational entities.While Ecron Acunova has aclinical license and henceneeds to continue as aseparate legal entity, theother operational entityNavitas is operated from aSpecial Economic Zone, toavail tax and other exportrelated benefits.

One holding company andone operational company

All acquired through M&Aand need to be retainedfor tax and other benefits.We are looking to optimizeon the number of entitiesin the long run.

All acquired through M&Aand need to be retainedfor tax and other benefits.We are looking tooptimize on the number ofentities in the long run.

In addition to the above, there are 11 entities in unique geographies, that are statutorily required for doing business in those countries.

Our SCM vertical APA Engineering consists of a holding company and 2 other subsidiaries.

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Balance Sheet

Balance SheetPeriod ending FY19 % FY18 %

Liabilities

Shareholders funds 15,274 65% 13,367 73%

Total outside borrowings 4,739 20% 3,078 17%

Other non- current liabilities 439 2% 376 2%

Current Liabilities & Provisions 2,887 12% 1,615 9%

TOTAL LIABILITIES 23,339 100% 18,436 100%

Assets

Non-Current Assets

Fixed Assets (Net) 11,326 49% 6,311 34%

Other Non-Current Assets 294 1% 348 2%

Current Assets 0% 0%

Cash & Equivalents 696 3% 3,409 18%

Trade Receivables 5,254 23% 4,692 25%

Unbilled Receivables 1,779 8% 629 3%

Other Current Assets 3,990 17% 3,048 17%

TOTAL ASSETS 23,339 100% 18,436 100%

Balance SheetPeriod ending

(INR Mn)FY19 % FY18 %

Fixed Assets (Net)

Tangibles 2,652 23.4% 2,135 33.8%

Intangibles 990 8.7% 1,016 16.1%

Goodwill on Consolidation 2,315 20.4% 2,396 38.0%

Goodwill on Acquisition 5,369 47.4% 764 12.1%

TOTAL 11,326 100.0% 6,311 100.0%

In INR Mn

Confidential 27

Cash Flow

In INR Mn

PARTICULARS FY 19

Profit Before Tax 2,56.89

Add: Non-Cash & Non-Operating Items 1,734.70

Less: Changes in Working Capital (1.901.06)

Cash Flow from Operating Activities 1,990.54

Investments by way of M&A (2,000.21)

Capex & Other Investments (3,617.69)

Cash Flow from Investing Activities (5,617.90)

Cash Flow from Financing Activities 992.64

Net Cash Flow generated during the year (2,634.72)

Add: Opening Cash Balance 3,408.65

Closing Cash Balance 773.93

Confidential 28

Trade Receivables

Day Sales Outstanding

March 2019

March 2018

Including AR from Acquisition

Including AR from Acquisition

In INR Mn

4661.78

5,254.04

4200 4400 4600 4800 5000 5200 5400

93 Days

94 Days

The Trade Receivables balance as on March 31st 2019 stands at INR 5,254.04 Mn as against INR4,661.78 Mn as at March 31st 2019. The Day Sales Outstanding has also gone remained steady at 94days as at March 31st 2019, which is a 1 Days’ Increase from March 31st 2018.

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DSO Benchmark

153

137

155

118

225

201 197

226

157

219

Pharma A Pharma B Pharma C Pharma D Pharma E Generics A Generics B Generics C Generics D Generics E

DPO of Large Pharma DPO of Indian Generics

94 DaysTAKE’s DSO

(FY19)

Number of Days

All Data is based on latest published information

TAKE’s DSO Days is in line with the industry standards

Confidential

Reduced dependency on Top Customers

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Diversifying Customer Base

20.9%

31.4%

17.2%

26.0%

16.3%

23.2%

Top 5 Customers Top 10 Customers

FY 17 FY 18 FY 19

TAKE has Widened it’s CustomerBase over the financial year,thereby reducing the dependency ontop customers, without having toloose any of it’s large accounts. Thisis also on account of TAKE’sPenetration Into Marketcomprising small and medium sizeplayers.


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Shareholding Pattern

Investor Category 31st Mar 19 31st Mar 18 31st Mar 17 31st Mar 16 31st Mar 15

Promoters 66.9% 66.8% 63.1% 68.7% 68.4%

FIIs 11.8% 13.1% 14.1% 4.3% 0.6%

Mutual Funds & Financial Institutions 1.9% 1.6% 2.2% 2.2% 0.7%

Trusts 1.6% 1.7% 1.7% 2.2% 2.3%

Bodies Corporate 6.7% 6.4% 8.8% 11.5% 16.5%

Others 11.1% 10.3% 10.1% 11.1% 11.6%

Total 100% 100% 100% 100% 100%

We are India’s only listed CRO. We had earlier listed ourselves in the Indian Stock Exchanges as a InformationTechnology company. However, since our focus has now shifted to the Life Sciences vertical, we are reclassifyingourselves as belonging to the Pharmaceutical Industry. The new categorization, once made effective, will help theinvestors, regulators and the Industry in understanding the Company and it’s performance in a better manner.


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Key Management Additions during the Year

Consistently Strengthening Leadership for

sustainability and profitability!

Added Senior Leaders to the Global

Team

Steve Galen Global Head

Clinical Division

Sarika Jain Global Head

Quality

MonoloBeelkeHead of Clinical& Scientific

AffairsShalini Chopra

CHRO

Sowmya Kaur

Global Head Pre-Sales

KaushikGanguly

Head-Clinical Operations-

APAC


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Financial Snapshot 5 Year Movement of Financials

In USD Mn

FY19 FY18 FY17 FY16 FY15

Income from Operations 291.60 245.93 200.23 157.25 119.39 Adjusted Operating EBITDA 59.67 48.48 40.97 35.73 25.77 Adjusted Profit Before Tax 35.68 29.13 24.58 22.13 13.95 Profit After Tax 25.51 24.77 21.77 19.06 13.06

Share Capital 2.11 2.24 2.02 1.81 1.91 Borrowings 68.12 47.32 33.99 47.88 25.39

Fixed Assets (includes Goodwill) 162.80 96.99 88.60 82.32 59.86

Trade Receivables 75.52 72.10 67.24 45.47 38.37 Cash & Cash Equivalents 10.01 52.38 16.97 19.29 19.84 Other Current Assets 82.92 56.50 35.88 29.65 25.52

Trade Payables 2.02 7.57 7.07 7.56 6.71 Other Current Liabilities 40.34 56.16 44.64 58.25 43.65

Net Working Capital 101.38 117.25 68.36 28.60 33.37

Confidential

To be a USD $500 Million Life Sciences R&D SpecialistVision 2021

$200 Mn$246 Mn

$292 Mn

$400 Mn

$500 Mn

2017 2018 2019 2020 2021

We are on track to achieve our 5 Year Vision


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Time: 4:00 pm (IST) | Date: May 16, 2019 Please dial the below number at least 5-10 minutes prior to the conference schedule to ensure that you are connected to the call in time. Local Access Number: +91 70 4567 1221 International Dial In (Toll Free)Hong Kong: 800 964 448 Singapore : 800 101 2045 UK : 080 8101 1573 USA : 186 6746 2133International Dial In (Toll)Hong Kong: 85 230 186 877 Singapore : 65 3157 5746UK : 44 203 478 5524 USA : 132 3386 8721

Conference Call Details

The teleconference will be moderated by Kuldeep Kaul & Hardik Sangani, ICICI Securities Limited

Earnings Conference Call Represented By

Srinivasan H.R.Vice Chairman and Managing Director

Ram YeleswarapuPresident and CEO

Subhasri SriramCFO and Executive Director

Shobana N SExecutive Director

D.V.RaviDirector

Confidential

THANK YOUwww.takesolutions.com

For more details, please contact:[email protected]

mailto:[email protected]

Documents

Earnings Release Q4 FY19 - TAKE Solutions › images › financial › take_solutions_q… · Significant one-time expenses to the tune of USD 4.83 Mn were provided for/incurred in